The Power of Customer Choice in Energy: A California Case Study in Accelerating Clean Energy Transitions

Abstract

Despite a lack of action at the national level, the transition to carbon-free energy is becoming a reality across the United States. At the local level, community choice aggregators (CCAs)—which offer communities public control over their electricity purchasing decisions—are accelerating this transition. By forming these electricity providers, member cities and counties can choose how much renewable energy is offered to their residents and businesses. In California, CCAs have become an effective policy tool at accelerating the transition to clean energy. Across the state, 182 cities and counties have become members of one of the 23 CCAs, with additional communities planning to join or form CCAs in the next few years. These CCAs have been effective at unlocking market demand largely stifled by an investor-owned utility monopoly by giving cities and counties greater choice and access to renewable energy. The vast majority of these CCAs procure more renewable energy than the investor-owned utilities they compete with. As a result, CCAs purchased 204% of the renewable energy required by the state from 2011 to 2019. By achieving California’s carbon-free energy targets more quickly than mandated, the state benefits from a cumulatively larger reduction in greenhouse gas emissions each year. The success of CCAs in California demonstrates the power of promoting carbon-free energy at the grassroots, enabled by public, local choice in electricity supply. With six states considering CCA-enabling legislation, and with hundreds of cities and counties across the United States working toward a 100% carbon-free energy goal, policies like California Assembly Bill 117 (2002) that enabled CCAs can provide a valuable tool to accelerate the transition to carbon-free energy. The purpose of this paper is to assess how CCA-enabling policy can support the clean energy transition using California as a case study. We assess three conditions that affect a CCA’s ability to accelerate the clean energy transition: CCA customer characteristics, CCA design features, and their policy and regulatory context. We conclude with a discussion of policy recommendations important to ensure CCAs can continue to support clean energy goals.